1 December 2021: Platinum’s demand growth potential suggests a breakout from gold and upward pressure on price: Platinum’s daily returns are approximately double those of gold’s which makes it attractive to systematic traders. This means that short-term moves in the platinum price are heavily influenced by changes in the gold price. Longer term pricing trends in platinum are determined by supply/demand and macro-industrial drivers, which tend to have a greater influence when the pricing relationship with gold goes through periods of weakness. The relationship with gold appears to be weakening again as we move into the end of 2021. This could be a precursor to platinum outperformance in 2022 on a recovery in vehicle production as the semiconductor shortage begins to ease. We note, however, that the continued spread of the Omicron variant may pose a headwind.
Platinum Perspectives
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